28 J,
UNriED ST.&.n;e
UNION
Co. et· aI. AIn-ALmiu,TIo1l' O. ll'Ju.ll'-
Nelmuko. Harch SO, 1. 1U.JLwi1'·:.Urn TBuGRAl'JJ OJuBB. , ' COMPANIES-GoVERNMENT
Under the gElZJ,8ral ru!.etm.t ,tlle gratlt of a franchise of a public nature ill personal '. tQ-,>the grantee, and cannot be alienated without the consent of the government, the pnvilege granted to the Union Paci1l.c Railway Company by the acts of 1862 and 1864 of constructing and teiegraph line along its right of way, for publicand commerciai uses; ·ClI.rried with it a corresponding obilgati!>n on the part of the com,p\IUY to llne"and it had no authority to transfer the franchili.e'to any other corporation. , "SAMB.' . '
\, :Nor ooflid ltUOhauthoritY,.be inferred from section 19 of the act of 1862, whloh authorized the company, indlsohaJ;'gll 0:( Its obligation, in the firs.t installce to make an arrangement with the companies owning tl\e then existing teiegraph line between and the JrlisSQlolri river· whereby that line might be removed and . ,Ban: placed upon. tbe railroad, right of way, the company having failed to make such an arrangement, and having accepted the whole franchise by constructing a new line . of itsowJ+ . . ' Aot July 2, 1864, Pl'Oviding"for increased facilities of telegraphic oommul1ication, !'and commonly lrnown as the·"Idaho Act," granted to the United States Telegrap.h company, a New Y!>rk corporation, a right to construct a line from the Hissoun'river to the P40iftc, and illso authorized the railroad companies to make an arrangement with this"eompaIiy for the construction of its line, like that authorized ,by section 19 of the ,act of 1862. Under this act part of the line was con· strUCted In conjunction with the Kansas Pacific CompanY.i.and then the United ,'States Telegraph Company consolidated with the Westeru union 'l'elegraph Company, and the line was finished under an arrangement between the latter oompany and the railroad. Held, that tb,is franchise was g-ranted for the purpose of construot,in,.g 'Boll 1,·n.d.ependent . an.d, altho.ugh the consolidation was authorized by the pf New York, thll w estll:\'b ,Union Company did not thereby obtain any right to acqlilNjthe telegraphio franchises granted by the Union Pacifio acts. In y,WWI of, tpe fact th,at tli,e .telegrap:tllc .franchises granted by the Union acts w.erEi.inaIienable:bythe grantees, ,!!ond also of the express rese17vation therein of thll' 'l"ightto "add to, alter, amend, or repeal." had'full power to pass the act ot, 4.ugust 7, railroad and telegraph oompanies which received government aid to henceforth operate tbeir telegr.aphlines by 1ihemselves alone, aud thr@ugh their own offioers and employes. AOT,. . .' ' ' '
"
8.SAME-:-;-bQNSO;LIDATION 01' COMPANIES; J
SAME..;;..REGuLATION BY GOVERNMENT.
Ii.
e.
.In !' Prpoeedjng instituted the :trnlted States to annul a CQntfact whereby the , telegrapbibfranchises of the Union'Pacific Railway Company were transferred to the Tele«raph ,OompanY,the intention and power of congress to prevel:\t ,S\1,qh, transfer, being .clear, the, court oannot oonSider ;any arguments based'iipdIi'toe allilg-ed faCt that the contract is beneficial to the peouniary interests of botb.therailway company and the publio. . SA:!lE-iJURIIlJtICTION 01' COURTS. .
The govern1bent, being the creator of tlie Union Pacific, Railway Company, and a large contrlbntbr to its finanees, and having a pecuniary interest in its successful ,management, has fullsuIlerVisory p!>wer over it, and may make and enforce through the reasonable regulations not interfering with vested rights. A,lthoug!;l the m.ain purpose of the act of 1885 is to compel the railroad companies to exercise treiJi' telegraphio franchises directl;}' by their, own officers and employes, the govyet, in enforeiIlg this requirement as against the Union Pacific ernmeD;t;J:/IlIY"properly. proceed by a bill in equity instead of by mandamu$, since the Western, Union, Telegraph Company has acquired property along the right of 'waYj and :its' interests therein can only be properly defined and protected by the fiexible Pfooelillreof a court of equity.
i. '
r. SAME-EQviTY JURISDICTION.
In Equity. Bill by the United States against the Western Union Telegraph Company and the Union Pacific Railway Company to cancel A whereby the telegraphic franchises of the railroad company
UNITED. STATES
:17.
WESTERN.' UNION TEL. CO.
29
were improperly transferred to' the telegraph company, and to compel the railroad company to exercise that franchise directly through its own officers and em,ployes. Decree for complainant. Charle8 H. Aldrich, for the United States. John F; Dillon, J. M. Woolworth; Ruah Taggart, and J. 1. Wilson, for defendants.
BREWER, Circuit Justice. On August 7, 1888, congress passed' an act, whose,<title, first and fourth sections, are as follows: "Chap. 772.A.n act supplementary to the act of July first, eighteen hundred 'and entitled · Anaet to aid in the construction of a railtoad and telegraph line· from the Missouri river to the·Pacific ocean. and to secure to the government the use of the same for postal, military, and other purposes,' and also of the act of July second, eighteen hundred and sixty-four, and other acts amendatory of said first-named act. "Be it enacted by and. house of representatives of the United States of America in congress assembled, That all railroad and telegraph companies to Which the United States hasgl'anted any subsidy in lands or bonds or loan of credit for the construction of either railroad or telegraph lines, which, by the acts incorporating them, or by any act amendatory 01' supple<mentary thereto, are required to construct, maintain, or operate telegraph lines, and all engaged in operating said railroad or telegraph lines. shall forthwith and henceforw<U'd, by and through theil' own respective corporateoffieerE! and employes, maintain and operate for railroad, governmental, commercial, -and all other purposes, telegraph lines, and exercise by themselves alone all the conferred upon them, and obligations aE!8umed by them under 'the acts making the grants as aforesaid. . ...... I« ... I« ............
"Sec. 4. ,That, in order to secure and preserve to the United states the full vlUueandbenefit of,its liens upon all the telegraph lines required to be constructed by and lawfully belonging to said railroad and telegraph companiea refei'red to in the first section of this act, and to have the same possessed, tised, and operated in conformity with the provisions of this act and of tht) several acts to which this act is supplementary, it is hereby made the duty of the attorney general of the United States, by proper proceedings, to prevent any unla with the rights and eqnities of the United States under this.act, and und.er the acts hereinbefore mentioned, and under all acts ofcongresstelating to such railroaQ& and telegraph lines, and to have legally: ascertained 'and finally adjudicated all alleged rights of all persons and corporations whatever claiming in any manner any control or interest of any kind in any·telegraph lines or property, or exclusive rights of way upon the lands of said railroad companies, or any of them,. and to have all contracts and provisions of contracts set aside and annulled which have been unlawfully and beyond thei,rpowers entered into by said railroad or telegraph companies, or any of them, with any othe1' person. company, or corporation." 25 St. p. 382.
'Thereafter this bill was filed by the government against the Western Union, Telegraph Company and the Union Pacific Railway Company, the Qbject of which, it may be stated in a general way, is to secure a decree and annulling a contract of date July 1, 1881, made by and betw,een the two companies I by which, as claimed, the telegraphic granted to the railway company have been improperly
30 telegraph company,.and ialso compelling tpe4ischarge bf ,format; oompany or all the tplegrnphic obligatioD1!!: im,pbsed, ,by!.its charter and the various acts of90ngre8s. '. The hinge. of case is this contract, and the primary question i8:,aido its validity.i ... I pasWtlierefore, to an' ,inquiry inti> its terms and extent; !twas made in 1881 by the railwR.y with the telegraph company. To ,a correct understanding of its terms and an interpretation of its meaning, the ;p#of:-Pfawryof these twoPC?mpll.nies; :and their relati{)Ds to each other, .company is aconsolidatell corporation. must be stated. The .. in the Railroad acts of 1864.; but cas qy those acts, by the consolidation of three Of those .constituent companies it is e:ol,ugb toaay that one--theUnion Pacific Railroad Company-was authoritM to'construct what'Wll.s aJterwards known as the "Main Line," and extends from'Council Bluffs and Missouri rivet, to Ogden, in Utah, where it forms a conDEletion "'-ith the Central Paci!lc; another was a corporation created by thelegialature the territory of Kansas, described in the act of 1862.a8 the "Leavenw.orth, Pawnee&,Western Railroad," whose name was afterwardscnanged to "Union Pacific Railroad Company! Eastern Division," and'agaiuto "Kansas Pacific Railway Company," and which was authorized to bijild a road from the'junction ofthe Kaw and Missouri rivers, at Kansas pity, westward through Kansas, to connect with the main line at the IOOth meridian of longitude west from Greenwich, which point of junction was afterwards changed and finally located at Cheyenne, and which company did in fact build the line from Kansas City west to Denver; and· the third, the Denver & Pacific Raihva:y & Telegraph Company, Which, under the authority of the act ofMarch 1869, (15 St. p. 324,) built .and owned the line from Denver to Cheyenne. A consolpallies took place ill January, 1880. It secured to idation Qf theEi6. to it the obligatiQns of the cOllstitupnt the nElw the rights and companies. The original Union Pacific Railroad act of July 1, 1862, (12 St. p.489,) creating the corporation, in the first section authorized and empowered it "to layout, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph;" and thereafter making to it a large grant. of and l.oan of bonds, added in the sixth section "that the grants aforesaid are made upon condition that said company shall pay said. ,bonds at maturity, and shall keep said railroad and telegraph lillecin repair and uile."· CouDsel for the government says in his brief that the Words II railroad and telegraph" are used in connection no lel:ls than 38 times in the act; The significance of this conjunction of words is, as claimed, the vesting of a joint railroad and telegraphic franchise in a single corporation,with personal obligation to discharge the duties imposed by each franchise, and with inability, by contract or otherwise, to transfer the duties created by either to any other corporation or individual. With delightful emphasis reference is made to the motto placed by the learned counsel for the railway company on a brief prepared by him in 1880, in I!olitigation then pending between the rail-
or
3;
UNITED, '8'rAT;E$ ,11. WES'J:ERN U.NION'ITEL. CO.
81
,way and c''relagraph franchises 'and,dllti:es to the government and pu bli.Q, Raihvay C@mpanies: : Indivisible, iod{',structible,inalilimable, JI:w:J.ofperpetuM ,obligation," .That is 'Ilndoubtedly the generallawa,s,tpallJranchises ofap\liblidlcharacter. It is said that in this: case,'byreason of the nineteenth act, ': I
"Tbat tbe several failliOad comp,anies.ijereiJl:named ' are authorized to enter arrangeme,pt ,with the l'acU1c Telegraph Company, the TelCompany, the CilUfornia 'State,Telegraph CompanY"lIo that tbe present 1ineo(tehigraph betWeenttie Mis80uririver and, 'San ,francisco may tie upon oralbng'tJie.'l1ne 'of said,rllill-oad and brllncnes said 'roads and branchesllre 'built; anlli if Ejal.d il,rrangement'beentered into, and .thetranlrt'er of si\id, 'telegraph line 'be :made,. in: accordance therawith'j to the ,line, Q\ said,t:ail:r.oad braJ)c1)es, sljch itransfel'sball, foian p:UlipoSes. oftbis belleld aqdcQnl!J.dered on tile. part qompanies of the provfsions ,in Xegard tc;> line of tele'graph. . An<,l 'in of are authorized 10' remove their line Of, telegraph ll:Iong and: 'ltp(Jn .the liil'a 'of, ratlroad berein prejUdice'to the rights of saldrailrolld compatliEis named herein. ", ' , ' " .
This' aecWm recognizes. tlie present existence ofatelegraph line 'between the Missouri, rivel'aDd JSan'Francisco, the pr(jpertY of 'certa'in telegraph"corporatiolls;' ,!twas a' Hile.whose construction the II1enthlid' aecured in this wa.y: On June 16, 1860, congress passed a.n ach'Bt!itled ,. An act to facilitate communication between the Atlantic andPaClficstates by electric telElgraph." 12 St. p ·. 4L It il.uthorized ,the secretary of the treasury--' . '''To advertise for sealed proposa1s;tObe receiVed for sixt1days after thp passage of this act, (and the fUlfillment of Whlcb shall be guarantied by responsible plU"ties,.l\s in the case of bids for mail contracts,) for tlie use by the govor lineS CJfmagnetic telegrl'pb, to be constructed within two yearsfrQm ,the thirty-tirst day of JUly, eijfhteeJlhundred and sixty,from some point or points on the west line of tb,e. .of Missouri, by any route or 'routes which the said contractors may 81'1ect, (connecting at such poititor points: by,teJegraph with the citiesOl'Washington, New Orleans, 'New York, 'Qbarleston, ,l'hiladf11phia, Boston,'and other citiesiin .the Atlantic, Southern, to the city of San Franciseo. in:th8 state of' Oaliforrila. for a period 9,f ten years, .and shall award the eon tract to the lowest responsible, biqder or bidders, provided such proffer .loes not require II larger,awount }>at year 'f1'0¥ the United States than forty thollsand dollars: "'. "'. '" pr07 Tided, that no such contract shallbe made until the said line shall be in actualoperatlon, ,and payments thereunder shall cease whenever the contractors fail to' comply.with their '" ' . ,lie , lind proVided, also, that said line or lines II< "''''shall be open to the use of all citizens of the United States during the term of the said on payment of the regular charges for the transmissio'n,'ofdispatches.". .
5, 1860,tJ:ie directors oLthe Western Union Telegraph Company passed a resoltitionauthol'izing its president, Hiram Sibley, to put in' a bid i lor the contemplated telegraph line, in his own name, but for the benefltof the company and such 8ssociates as might thereafter be united with it. In purSUl\nCll of ,this Mr. Sibley putin an was, accepied'py the secretary of the treasury 9D Septem-
32
. -, :J'E.OERAL REPORTER, voL 50.
ber22, 1860, :and the line from Omaha: westward to the Pacific:'ocean was' constru<itedand'put ,in operation. While the construction of this line was carried on in lite names of other cdrporations,-as was also the contract, the personal of Mt., Sibley,-yet all was at the histance and for the benefit of theWestem Union Company, and those· corporations were subsequently merged in, and the contract transferred to, that company. It was this line, thus aided by the government, whose transfer to the right of way' was authorized by section 19. Now, this section 19 grantB'some rights!l-qd privileges, but what are they? ,with constructic;>o, only the privilege of transferring,by arrangement the telegraphic franchise to the named telegraph ®mpl;Lnies. It was a, privilegl'l to the railroad company; and it was the Union Pacifi(l'Railroad Company alone which, so far as this case is coocel'ned,had the, benefit 'of such section. It had the option either to a telegraph line a,nd accept the franchise itself,ortransfer the Py agreement tothose telegraph companies. It exercised this optiQJl"and l,:milt a line from Omaha to Ogden; and the telegraph companies, on their part, exercised the right, given in the last part of of transfer1ing their line to the right olway. The privilege railr()ad company was not of building the telegraph line, aIfd,tpeIf ,leasing it to some other c()mpany, or transferring it, with fr,anchise, to such other company. Indeed, reading the and by the letter, it, as counsel for the government sayll, only to an arrangement, for the construction, and does not include the operation and maintenance, of the telegraph line. While the may have a broader meaning, and .include the whole franchise, yet:the use ,of ij,le single word" construction" limits the option to thatwhieh includes construction, and means simply that, in view of the hazardllnd magnitude of the enterprIse,the railroad company was given theprivHege of tranSferring the telesraph burden at the commencement line, and cannot be .conto companies which already had struedas/giving til the raUroad company a permission,aftl'lr it has the whole franchise and built a telegraph line, to lease or transfer that and the telegraphic franchise to another com:pany. ·;Such was the construction placed upon this section by Judge McORfRyand Justice MILLER, as far.back as 1880, in suits then pendUnion ing bet,we(l,n the Western. Union Tl'llegraph Company and COJIwany. 1 McCrary, 418, 541, 581, 586, 1 Fed. Rep.. 745"and 3 Fed. Rep. 1, 423,721. In the last case, on the last page,may be found the language of Mr. Justice Miller, asfoUows: "I concur with Judge MCCRARY hi the opinions delivered by him on the former applications before him to diSsolve this injunction, that on the face of the actS()f. congress of 1862 and 1864, called ·The Pacific Railroad Acts,' the obligation o( building a telegraph .line along its right of way, and of operating line,.orhaving it operated under the control of the railroad company, was au obligation which they could notl\bandon, and which was inconsistent with, the contract made in this case, so far as those two acts are concerned; and that, if the case rested on the provision of those original Pacific Railroad acts, namelY',the act of 1862 and amendatory act of 1864, the present contract
UNITED STATES
WESTERN UNION TEL. CO.
83
would be ,void. all in violation of the obligations imposed upon the railroad company by those acts." That litigation grew out of these facts: Prior thereto the Union Pacific Railroad Company and the Kansas Pacific Railway Companytwo of the constituent companies of the present railway company defendant-had made contracts with the Atlantic & Pacific Telegraph Company and the Western Union Telegraph Company, respectively, for the telegraphic business on their lines. The railway companies sought to break those contracts, take possession of the telegraph lines, and make newarrangements with the American Union Telegraph Company, and to prevent this action by the railroad companies was the purpose of the litigation; so that the question of the powers of the railroad companies came directly in issue. I agree with those judges that the privilege granted by section 19 was exhausted when the railroad company built its telegraph line, and accepted the telegraphic franchise. Coming now to the act of July 2, 1864, commonly known as the II Idaho Act," (1S St. p. 373.) This contemplated a new and independent telegraph line to the Pacific. This is apparent from the title, read. ing, as it does, "for increased facilities of telegraphic communication," and it granted to a company other than those mentioned in the act of 1862, to wit, the United States Telegraph Company, the right to construct a line from the Missouri river to the Pacific, and also authorized the railroad companies to make a like arrangement with this company for the construction of its telegraph line. What, if anything, was done under this act is not entirely clear from the testimony. The construction of the Kansas Pacific Railroad from the Missouri river westward through Kansas was commenced by Samuel Hallett, as a contractor with the company. As such contractor, and for the company, he built hoth the railroad and the telegraph line as far as Lawrence. Thereafter John D. Perry, of St. Louis, and his associates. came into possession and control. From Lawrence to Rossville, a distance of less than 50 miles, it would seem as though the United States Telegraph Company and the railroad company joined in the expense of constructing the telegraph line, but under what exact arrangement is not disclosed. Then the United States Telegraph Company was consolidated with the Western Union Telegraph Company; and the latter with the railroad company, under some arrangement, afterwards put into a contract of date October 1, 1886, completed the telegraph line to Denver. It appears that at the time the act of July, 1864, was passed there was a corporation organized under the laws of the state of New York, known as the "United States Telegraph Company." Shortly thereafter it was consolidated with three other compimies into a new corporation, bearing the same name, and this consolidated company was the one which shared in the build· ing of the telegraph line from Lawrence to Rossville. It then consolidated with the Western Union Telegraph Company,-also a New York corporation, and one which controlled and afterwards absorbed the corporations named in the nineteenth section of the act of 1862,-as the Dwners of the telegraph line, and with whom the railroad companies v.50F.no.1-3
thai the cOI/-solidations were authorized by the laws of thE" state of New' Y6rk; bubl()esit follow thattbe Western\Union Telegraph Company, by virtue thelloof,acquired the right under the Idaho act to arrange for the telegraphic'franchisesgrantedby the Union Pacific a:ct? I think not. The privilege given by the ldahoact was personal to the United States Telegl'apbCompany. I t was not to it and its assigns, or to it and its successors. ,The general rule is that a grant of a franchise of a public naturelis ,personal in its character, and incapable of transfer without the 8anctibn: ,of the government making the grant to any other person or corporation.' It creates a contract between the government and its grantee, and on the part of the latter carries with it theobllgation that it will persanallydischarge the duties and exercise the rights of that franchise. It is Mr. Justice. MILLER seemed to be of, opinion, in the case referred to, that the Western Union Telegraph Company succeeded to all the rights of the United States Telegraph Company; and yet, as the case whenjit,came before him. ,was on a motion to dissolve an injunction, he left this matter open to further consideration on the final hearing. In his opinion (page 591, 1 McCrary, and page 731, 3 Fed. Rep.) he says: "The existence of this United States Telegraph Company, and the assertion, of the rig1lts of the Western Union Telegrapl1 Company under it, and the effort to sl:)ow that th,e contraet now in question was made undl'r the act of \he successor of that company, is for the first timp presented to the court'"t this hearing, and mllch that might make it plain either that there was'sueh a right or that there was not such a right may possibly exist and be brought t(fligbthereafter. when the case can be heard at ll. Iinal hearing on the iS8uesmade by the pleadings; and this branch of the subject will therefore be for the,present." , While 1 am satisfied as to the formalities attending these consolidations, lam of opinion that by them the rights'and privileges given to the United States Telegraph Company by the Idaho act were not transferred to the Western UtiionCompany. Beyond the general rule of law referred to, it is obvious from the legislation of congress that two independent lines were tontemplated, and that it was not intended to grant to a company having one line the right to build and operate another. The companies which had the line then in existence were known to It had given to the railroad companies the right to . make arrangement with them , and. by that arrangement to make their telegraph line the fulfillment of the telegraph obligation cast upon the railroad companies. If congress had intended that the same companies should build and operate another'line, it could easily have made the gratlt to<them. The 'fact· that it named another, an independent company, is evidence that competing lines were its purpose; and with that purpose obvious on the face of these, statutes it cannot be that by consoiidation: this purpose could bElfru!!trated. It may be said that the'law of New York authorizing consolidation of corporations was in force at the time of the passage by congress of the act of July 2, 1864; that congress must be presumed to have known
UNlTED sTATttS tI.'WESTEnN
umoN
TEL. co.
35
this, and therefore impliEicUy consented ,to any'subsequent transfer of the franchise granted' by that'act to any company into which the United States Telegra'ph .company, might lawfully be consolidated; and there is force in the argument. If the subject of the grant' was land '01' other tangible property, it would, in the'absence of restrictive words in the act of congress, be true that the subsequent disposal of such tangible property could bernade by the grantee corporation in any way authorized by the laws ofthe state of New York. But there is an element of pers6nality of obligation in a franchise which is not found in a grant of tangible property,and, in "iew of the intent of congress, displayed by its several acts; the true construction seems to me to be that it granted this franchise. and privilege to be exercised by the corporation nanied as grantee, and by it alone, and only so long as it preserved an independent corporate existence. It is worthy of note, also, that when the application was made by the Kansas road for the government nid promised on completion or the first 40 miles, the affidavit of the president stated "that said company have completed about 40 consecutive miles of said railway and telegraph, ready for the service contemplated by the acts of congress of 1862 and 1864;" also that the act of March 3, 1869, (15 St. p. 324,) authorizing an arrangement by which the Denver & Pacific Railway & Telegraph Company should have the benefit of the Pacific Railroad acts so far as respects that portion of the Kansas branch which lies between Denver and Cheyenne" in terms authorized the Kansas Company to contract with the Denver Companyl'for the construction, operation. and maintenance oOhat part of its line ofrailroad and telegraph between Denver," etc., with the proviso in section 2 thn t there should be" a continuous line of railroad and telegraph from Kansas City, by way of Denver, to Cheyenne." Obviously this Iegislatibn was upon the assumption by congress-an ass)lmption based, doubtless, on the report made by the president of the Kansas Company-that that company had made no contrac;:t with the United States Tdegraph Company, and was the builder and owner of both the railroad and telegraph line from Kansas City westward. More than that, the articles of consolidation, signed in 1880, by which the Union Pacific Railroad Company, the Kansas Pacific Railway Company, and the & Pacific Railway & Telegraph Com1'any were consolidated into the present railway company defendant, recite that the first-named company owns its line of railroad and telegraph, and that the second company owns and operates its railroad lind telegraph line. These recitals, good against the railway company, seem to imply that up to the time of the contract complained of the same corporations owned both railroad and telegraph, whatever privileges of use of the latter might by previous contracts have been transferred to other com panies. These considerations lead to the conclusion that at the time of that contract the double franchise of railroad and telegraph lines remained intact in the railway company, incapable of alienation without further sanction of congress. Hence, irrespective of the reservation in the original Pacific Railroad acts of the right to "add to, alter, amend,
S6
FEDljl:RAL :REf,,:RTE:R,
vol.
pr repeal," and the provision in the act of 1888 directing tbepersonal exercise of the telegraphic franchi!.'eby the railroad company, I should be forced to examine the contract of 1881 as ,the act of a company, charged with a railroad and telegraphic franohise, and incapable of alienBut the act of 1888isnot to be ignored. It is pertinent, ating for it removes all doubts. .It is a valid exercise by congress of its power to alter and amend. It does not pmport to grant a new or take away an old franchise.. simply to regulate t1;le manner in which a franchise already granted.anq possessed .shall be exercised, and surely the power to regulate the manner of exercise is within the reserved power to alter and amend the charter, With reference to the of this power to .alter and amend, and concerning the present rail way company defendant and its charter, OhiefJustice WAITE said in the Sinking Fund
Cases, 99 U. S. 700, 720: "We are of the opinion, that congress not only retains, but has given special notice of its intentiQn'toretain, full and complete power to make such of the charter as come within the just scope ·of alterations and legislative power. That this power has a limit, no one can doubt. All agree that it cannot be used to take away property already acquired under the operation of the charter, or to deprive the corporation of the fruits actually teduced to possession of contracts lawfully made; but, as was said by this. court, through Mr. Justice CLIFFORD, in Miller v. State, 15 Wall. 498: 'It may safely be affirmed that the reserved power may be exercised, and to ah;nost any extent, to. carry 'into effect the original purposes of the grant, or to. secure the due administration of its affairs, so ll,S to protect the rights of stockholders an(l of creditors, and for the proper disposition of its assets;' and again, in HoliJokeCo. v. Lyman, Id. 519: · 'ro protect the rights of the public and of the corporators, or to promote the due administration of the affairs of the corporation.' Mr. Justice FIELD, also speaking for the when, in Tomlinson v. Jessup, Id. 459, he court, was even more said: 'The reservation affects the entire relation between the state and the corporation, and places under'l'egiillative control all rights, privileges, and from the state;' and again, as late immunities deri veil by its charter 8sRail1'oad Co. v. Maine, V6·U. S. 510: 'By the reservation the state retained the power to alter it [the charter] in all particulars constituting the grant to the new .company formed under it of corporate rights, privileges, and immunities.' Mr. Justice. SWAYNE, in Shields v. Ohio, 95 U. S. 324, says, by way of lilflitation: 'The alterations must be reasonable. 'rhey must be made in good faith, and be consistent with the object and scope of the act of incorporation. 'Sheer oppression a.nd wrong cannot be inflicted under the guise of amendment or alteration.' The rules, as here laid down, are fully sustained by authority. Further citations are unnecessary." Nothing need be added to this definition of the scope and limits of such a power. Within that definition the act of 1888 was valid legislation; and it, in effect, says to the railway companies: "Notwithstanding you may have in the past discharged the duties of your telegraphic franchise through other corporations and by other instrumentalities, you must in the future discharge them .solely through your employes." It orders off from this franchise all other corporations. Coming, then, .to the contract, it is too long to be quoted in full. Its obVious purpose and expected effect, and, in view of the testimony as to
UNITED STATES V. WESTERN UNION TEL. CO.
37
what has taken place since,it may be added, its actnal result, was and has been to transfer the telegraphic franchise to the Western Union Telegraph Company. It must be borne in mind that this franchise, as granted by the acts of 1862 and 1864, was not the mere right to place a telegraph wire along the railroad for its sole use. A telegraph wire is a necessary part of a complete railroad under the urgencies of railway operation to-day. The grant of a franchise to build a railway carries with it the right to add such a wire. It is as much a part of the railroad as its depots or its wrecking trains. So nothing of this kind was templated in the telegraphic franchise granted by the acts of 1862 and 1864. What was meant was a telegraph line for public and cial use, as independent and complete in itself as though not built along the railroad right of way, or used at all in connection with its operation: Now, this contract operates to-transfer such telegraphic franchise to Western Union Telegraph Company, and intended to make it exclusive beneficiary thereof, Its purpose, as declared, is "of provid., ing telegraphic facilities for the parties hereto, and of maintaining .and operating the lines of telegraph along the railway company'sra.ilroads in the most economical manner in the interest of both parties; and for the purpose of fulfilling the obligations of the railway company to the government of the United States and the public in respect to the graphic service required by the act of congress of July 1, 1862." The third clause reads. that"The rail way company, so far as it legally may. hereby grants and agrees' to assure to the telegraph company the exclusive right of way on. along; upon. and under the line. lands. and bridges of the railway company. and, any extensions and branches thereof. for the construction, maintenance,· operation. lind use of lines of poles and wires, or either of them, or underground 01' other .system of communication for commercial or public uses or business. 11<' * II< and the railway company will not transport men 01' material for the construction or operation of a line of poles and wire or wires' or underground or otber system of communication in competition with the lines of the telegraph company, party hereto, except at and for the rail way company's regular local rates, nor will it furnish for any competing line any' facilities or assistance that it may lawfully withhold, nor stop its trains, nor distribute material therefor at other than regular stations: provided, always, that in protecting and defending the exclusive rights given by this contract the telegraph company may use and proceed in the name of the railway com'" pany. but shall indemnify and save harmless the railway company from any and all damages, costs. charges. and legal expenses incurred therein or thereby." And the fourth clause provides that"It is mutually understood and agreed that all of the telpgraph lines and' wires covered by this .contract. whether belonging to or used by the telegraph company or the railway company. for the purposes of this contract. as herein provided. shall form part of the general system of the telegraph company.' The railway company further agrees that its employes shall transmit over the lines owned. controlled, or operated by the parties hereto all commercial telegraph business offered at the rail way company's offices. and shall account to the telegraph company exclusively for all of such business and the receipts thereon. as provided herein. No employe of the railway company shall,
38
FEDERAL' REPORTER.
vol. 50.
by,ot bl'Vle a'ny cotineetii.m ·wlth, any other telegraph :co;mpany party hereto, and the telegrilph company shall l'ightto the occupancy. of and con· nf>ctionwith the railway:coliJpany's depots or station houst's, forcommerciai or public purposes as agai nst any other telegraph com pany: pro· vided', that if any pprson or party. or'any officer of the go\ernlllent. tendpr a mesSl\ge for transmission over the railway telegraph lines between Coullcil Bluffs. and Ogden. at any. railway tE!lel{raph 8talion between those points, the service be .by the railway company, the operator to whom the same is tendc"red' shall receive and forward the same, accordiilgly, at the rates to ,bE! fixed by the rail way company, to the point of destinlltion, if I'1Ot beyond its,own lines. If the destination of said message be beyond said railway complmy's lines, the teJegraphcompany, when receivingthe same at the point at which it Jea ves the· said rail way Jines, may de.. mand the prepayment of tolls for the service of forwarding the message on .its own lines: provide<l, however. that the lotal receipts of the railway company on such mpssagesshall be divided between tbe parties hereto in tbe same marinI-rand subject to the same conditions as provided in the tenth elauseof this :agreement;"
Further; in the 5th t 6th, and 7th clauses we find these provisions: .. Fifth. The railway company agrees to furnish at its own expense all tbe labor, except .a,fqreman, for the maintenance, repair. and renewal or reconstruction ot the lines and wires along all the railway company's railroads, arid for the construction, maintpllance, repair, and renewal or reconstruction of such additional wires or lines of poles and wires as may be required for commercial or railroad tt'lpgraph purposes along said railroads, and along future branches lind extensiOJis thereof, and along npw railroads constructed or acquired by the railroad company, except as modified in the sixth clause bereof. The telegraph cotnpany shall furnish a foreman skilled in the work of telegraph construction. who shall have charge of the construction and reconstruction of the lines and wires and the direction of the labor furnished by tIle railway company for such purposps, said foreman to be subordinate to the superintendent mentioned in article twelfth of this agrepment. "Sixth. Each party hereto shall pay one-half of the entire cost of all poles, wires, insulators. tools. and other material used for the maintenance, repair, and rent'wal or reconstruction of existi ng lint'S and wirt's along all of the railway company's raiJroatls, and for the construction, maintenance. repair, and l'enewal or l'econstl'uction of sllch additional wires or lines of poles and wires as may be req uired for COUl mprcial or railrOad telegraph purposes along said railroads, and along future branches or extensions thereof, and along new railroads constructed or acqUired by the railway company. until the tutal number of wires shall amollnt to three for the exclusive use of eaeh party hereto between Council Bluffs and Ogden; two for the exclusive use of eacb party hpreto Kansas City and Denverj and one for the exclusive use of each party hereto on all other portions of the railway company's railroad branches and extensions. Each party hereto shall pay the on1ire cost of the constrl.lction, maintenance, repair, and renewal or reconstruction of wires for its exclusive use in excess of the number hereinbefore mentioned. The material of the telegraph company for additional wires to be transported free of charge by the rail way company over its own lines, ,as hereinafter provided. The telegraph company agrees to furnish at its own expense all blanks and stationery for commercial or other public telegraph business, and all instruments, main and local batteries, and battery material for tbe operation of ita own and tile railway company's wires and offices.
UNITED STATES II. WESTERN UNION TEL. CO.
39
"Se1'enth. Each party hereto shall have the exclusive use, under the dlvls. ton of the cost of material hereinbefore provided, of not exceeding three wire" between Council Bluffs, Iowa. and Ogden. Utah, and not exceeding two wires between Kansas City, Mo., and Denver, Col., aod not exceeding one wire on all other portions of the railway company's railroads: provided, however, that in case either party hereto shall require additional wires between said places hereinbefore mentioned, or along any of the oth61' railroads of the railway company, the party requiring Buch additional wire or wires shall furnish at its own expense all the material for the construction, maintenance, repair, and. renewal 01' reconstruction of such additional wire {)r wires."
Also in the 9th, 10th, 12th, 13th, and 14th clauses these provisions: railroads, upon application of, the superintendent or other officer of the telegraph company, all officers of the company when traveling on its business, and all employes of the telegraph company when traveling on the tell'graph company's business connected with or pertaining to the lines or wires and offiCeS along any 9f the railroad company's railroads. And the railroad company further agrees to tranaportand distribute free of charge along the line of any and all its railroads all poles and other materials for the constrQ.ction. maintenance, operation, repair, or reconstruction of the lines and wires co.yered by this agreement, and of such additional wires or lines of poles and wires as may be erected under and In pursuance of the provisions of this agreement; also all material and supplies for the establishment, maintenance, and operation of the offices along said railroads; it being understOOd that no charge shall be made for the transportation of roles or other materialS over any of the railwuy company's railroads for use on any other of its railroads. "Tenth. The company agrees to supply instruments and local batteries, and blanks and stationery for commercial telegraph bllsiness 3S hereinbefore provided, at officesestablisbed ami maintained by the railway company. ALal1 telegraph stations of the railway company its employes shall receive, transmit, and deliver such commercial or public messages as may be offered, and shall render to the telegraph company monthly statements of such business, and full accounts of all receipts therefrom, and the railway company shall cause all of such receipts to be paid over to the telegraph company monthly, As compensation to the rail way company for the l!ervice8 herein provided for, the telf'graph company agrees to payor return to the railway company monthly one half of the cash receipts at telegraph stations maintained and operated by and at the expense of the railway company. tolls on ocean cable messages and tolls for lines of other companies excepted, all of which shall be,retained by the telegraph company, it being understood that the railway company shall not be entitled to any portion of the tolls on ocean cable messagea, or tolls to lines of other companies, or to any portion of amounts checked against other offices. 'fhe railway company that its employes shall not compete with the telegraph company's offices in the,tranaaction of commeroial tt'legraph business at any point where the telegraph company may now or hereafter have an office sel'arate from the railway company's office, by cutting rates or by active efforts to divert business from the telegraph compimy." "Twelfth. It is further agreed that the management of the wires, the repairs of all tbe lines along the railway company's railroads, and the distribution of all materials for use on said lines, shall be under the superVision and control of a competent superintendent, who shall be appointed and paid jointly by the parties hereto, and whose salary shall be fixed by mutual agreement; and said superintendent shall be equally the servant of each of the .. Ninth. The railway company agrees to transport free of charge over its
40
FEDERAL REPORTER;
parties hereto, and shall,aa far as practicable, protect and harmonize the interes.tof both parties hereto in the transaction of the railroad and commercial telegraph business along the railway company's railroads. . "Thi1·teenth. The railway company shall have the right to the free use of any telegraphic patent rights or new discoveries or inventions that the telegraph company now owns and uses in its general telegraph business, or which it may hereafter own and use as aforesaid, so far as the same may be necessary to properly carryon the business of railroad telegraphing on the line of said raUroads as prOVided for herein. "Fourteenth. The telegraph company hereby promises and agrees to assume and protect the railway company from the payment of all taxes levied and assessed upon the telegraph property belonging to either of tLe parties to this agreement." The import of these various provisions is clear. They mean that the telegraphic business and the telegraphic franchise, in the sense we have :defined it, should be exercised by the Western Union Telegraph Com.pany, and that no other company-railway or telegraph-should touch it. The purpose was-a purpose disclosed by every section and line of the contract-that the public and commercial use of the telegraph wires should belong to the Western Union Company, leaving to the railroad company only so much use of the telegraph wires as was necessary for its own business. That such was the contemplation of the parties in this contract is evident, not only from its provisions, but from the actual workings subsequent thereto. The Western Union Company transacts the commercial business, and the railroad wires are used exclusively or substantially so for the railroad business. The telegraphic franchise is in fact separated from the railway company, and exercised by the Western Union Company. The telegraph superintendent of the railway company, Mr. Korty, says in his testimony that"The Union Pacific has fOllr wires from Omaha to North Platte, and three from North Platte to Ogden. 'fhe other wires on the poles are used exclusively by the Western Union Company for commerCial telegraph business. The three or four wires of the railroad company are entirely used by it for operating its roads. It would not be practicable to operate those wires for general commercial business Without seriously interfering with the railroad business,and the railroad company's wires would be inadequate to carry any additional business." , Of similar effect is the testimony of J, J. Dickey, the western 8uperof the Western Union Company. The report made in 1889 to the interstate commerce commission by the cumptroller of the Union Pacific Railway Company states that"The wires owned by the railway company are used for its railway business, and those owned by the telegraph company are used for commercial business." In the bill filed immediately after the passage of the act of 1888 by the Western Union Telegraph Company against the Union Pacific Railway Company, in which an injunction was sought by the former against the latter to restrain any interference with the contract of 1881, it is alleged by the telegraph company, in paragraph 12, that"The said. wires used by the defendant in the operation of its road are not eq.ulll). to its necessities in that behalf, and it is impossible for it to do any
UNITED STATES t-. WESTERN UNION TEL. CO.
41
business for the public or other companies on said wires without seriously interfering with and impeding the operation of its engines, cars. and trains; and, if it undertakes to do so, it will be under the necessity of using your orator's five wires, or some of them. Upon your orator's said wires is carried ori almost the entire transcontinental business of the Uuion. Nor can your orator submit to any interference therewith by the defendant or any other party without seriously impeding and disarranging that business to its great loss and the public's inconvenience." And in the brief in this case the counsel for the Western Union Company, replying to one suggestion, say: "This objection, however, is easily met by the fact that the railway company has, under the contract of 1881, employed us to operate its lines for commercial business, it resening to itself theil' operation for railroad business." Clearlr, confessedly, then, the commercial business is transacted by the Western Union Company. If the contract be as suggested,-the mere hiring by the railway of the telegraph company to do this business,-there can be no doubt of the power of congress to put an end ta such hiring, and to compel the corporation which it has created to employ other instrumentalities for doing the work. But I think the concession of counsel does not come quite up to the proof. The fact is, the commercial telegraph business is as fully in the hands and under the control of the Western Union Company as if the wires did not run a10ng the right of way, and their working was wholly disconnected from the operation of the railroad; and this result was contemplated and intended by the conLract. So it is that the lessons of experience support and es" tablish the construction placed upon the contract of 1881, to the effect that the telegraphic franchise, as a franchise of independent, public, and commercial transportation, was intended to be and was transferred by the railway company to the Western Union Company, leaving only to the former so much use of telegraph wire as would facilitate and further its own railroad business. Summing it up in a word, the purpose and effect of that contract was and has be('n to transfer the full telegraphic franchise from the railway company to the Western Union Company; Such transfer was beyond the authority conferred by the acts of 1862 and 1864; and yet, to prevent any doubt, the government, in the exercise of its reserved power to alter and amend, by the act of 1888 in terms has commanded the railway company to exercise all the duties of its telegraphic franchise, and forbidden the performance of those duties by any other company, and through any other instrumentality than the direct servants and employes of the railway company. As the contract of 1881 contemplates action distinctly forbidden by the act of 1888, two matters suggested by counsel for defendants seem excluded from consideration. It is insisted that the practical working of this contract is pecuniarily beneficial to the railway company, and also that the public interests are in fact subserved by placing the commercial telegraphic business along this road in the hands of that corpora" tion which practically controls the telegraphic business of the country . Assume that both these contentions are sustainable, (and I am inclined
42
FEDERAL. REPORTER,
voL 50.
to believe that, they are,) yet I aItl constrained to bold that, though established, they constitute no defense to the demand ()f the government. Ta'ke the first; and assume that the' testimony establishes beyond question that the contract is pecuniarily beneficial to thel'ailway company, that it earns more money by its continuance thauit would by conductinj;t its own employes the commercial telegraph business, and yet maya court, by reason of this fact, decline to enforce the plain mandate of the government which created this corporation and gave it its powers? The government is, it is true, pecuniarily interested as f<econd mortgagee, but a higher interest is that the adminiEltration of its franchises should redound to the general welfare, and not merely to the pecuniary interest of its grantee, or even of itself. The dollar is not always the test of the real interest. It may properly be sacrificed if anything of higher value be thereby attained. But whether the dollar be gained or lost, i.snot in a matter of this kind a question for the courts. It is for the legislative branch, as representative of the popular will, to settle all such questions. Given power to act in the legislature, and its mandatory action, the simple province of the courts is to enforce such mandate, and they have no revisory determination as to the wisdom or folly of the commanded .8ct. In U. S. v. Railroad Co., 91 U. S. 72. 91, this court, by Mr. Justice DAVIS, responding to a question of this kind, observed: "Counsel have dwelt with slJecial emphasis upon the consequences which would result from a decision ad\·el'se to the appellant. We cannot consider upon this record. The rights of them in disposing of the quel!tions the parties rest upon a statute of the United 8tatt's. Its words. as well as its reason, spirit, and intl'n\ion. leave, in ollr opinion, no room for doubt as to its true meaning. We cannot sit in judgment upon its wisdom or policy. When we have interpreted its prOVisions, if congress has power to enact it, our duty in connection with it is ended." So here I may· not sit in judgment upon the financial wisdom or folly of this act oC 1888. I may only inquire whether it is within the power ()f congress, and whether its enforcement infringes any vested rights of the defendants. Thl,l.t its enforcement may mean loss to either corporation, and loss to the government, does not determine the power of congress, or absolve the courts from the duty of enforcing its mandates. And so with the other question. It may be true, as contended,and, not disturbed by the common hue and cry about monopoly, I am disposed to believe that it is true,-that the real interests of the public are subserved by the consolidation. of the various transportation systems, and that the putting into the hands and under the control of onu corporation the telegraphic business of the country would secure to the public cheaper and better service. But, like. the other, this is no question for the courts. Thi8 is a government of the people. They express their wUl through legislative action. It would disarrange our system of gov. ernment, and would be freighted with peril, if the courts attempted to interpose their opiJlions upon matters of policy, to stay orthwart such constit!ltio1l811y It is enough for the courts to
·
'.,
UNITED STATES fl. 'WESTERN
UNION' TEL. co.
protect and enforce rights, without entering into questions of policy. So, conceding in respect to these matters all that is claimed by counsel for defendants to be true, I am of opinion that they present no matters, into which' the court is at liberty to inquire, or which in any manner operate to prevent the enforcement of the declared will of congress in the act of 1888. Neither can there be any question in this case of the right of the government to maintain this bill. It was the creator of the railway corporation defendant, and a large contributor to its finances. It made absolutely a large grant of lands. It loaned its own bonds, and holds to-day a second mortgage. By reason of its governmental duty to regulate thl.:! affairs of this corporation, and also its pecuniary interest in their successful management, it may properly legislate in respect thereto, and invoke the aid of the courts to compel compliance with its determination. And when it is the complainant the inquiry is different and broader than when the corporations themselves are thA contesting parties or when only individuals are challenging their action. The supervisory power of the government is plenary, and its commands to its corporate creations must be enforced, unless they trespass upon some vested rights of property. I The only remaining question which I deem important to consider is the objection made to the jurisdiction of a court of equity. It is urged that if a duty is cast upon these corporations, it must be enforced by mandamu8. I had occasion to notice this question in the case of Chicago, R. 1. &- P. R. Co. v. Union Pac. Ry. Co.,47 Fed. Rep. 15. and deem it unneceElsary to add anything to my observations in that opinion. There is to be considered beyond the mere mandate to obey the act of The Western Union Telegraph Company has property along the line of the railway company. The determination of its interests therein, protection against their sacrifice, and the securing of payment to it from the railway company ure matters which cannot be settled by a court of law in proceedings in mandamu8. A comt 0; equity. with its flexible procedure, can alone meet all these exigencies. The jurisdiction of such a court seems to me necessary and unquestionable. A decree will thereJore be entered in favor of the complainant, setting aside the contract of 1881, and putting an end to the relations created by and subsisting under it between tho two defendants, and with it a· mandatory injunction upon the railway company to hereafter, by its own agents and employes, and not through the instrumentality of the. Western Union Campauy, exercise all the duties created by the telegraphic franchise of the acts of 1862 and 1864, and directing the latter company to vacate all the offices of the railroad company, with leave to the W('stern Union Company to apply for and have stated an account between it and the railway company, as to the value of its property along the line of the latter's l'Uilroads, anel jointly used by the two companies, and for such other relief as equity aud good conscience require. MEMORANDUM. A copy of this opinion is sent to each of the counsel in the case. Tbe counslil for tlle government can prepare a form of decree, and'
FEpERAL REPORTER.
submit it to the counsel foJ' defendants;,and. in case of disagreement as to terms, it must be summitted to me with the suggestions of the parties, and no entry of record will be made till I have approved it. I have purposely directed a decree which shall be final in character in order that an appeal may be taken, and the rights of the parties fully stlttled, before the labor and ex. pense of accounting shall, if finally ordered, be undertaken.
FRANCIS 'lJ. HOWARD COUNTY.
(Circuit Court, W. D. Texas, El Paso Division. April 9, 1892.) 1. Under Gen. Laws Tex. 1881, pp. 5, 6. authorizing counties to issue bonds for the erectiollof court-houses, Hpward county issued bonds in May, 1883. which. on account of an error, were recalled and canceled, and a new series issued in November, 1883. Between these dates an amendment to the constitution was adopted, redu<;ing the rate of taxation allowed to be levied by countiell for the erection of public buildings. The plaintiff bought in open market some of the bonds issued in November, 1883, and sucs for the interest due upon them. Beld, that he was a. · purchaser with notice of the constitution as amended, and that; as he claimed no interest under the contract for the erection of the court-house, the amendment applied to the bonds in his hands. SAME-AUTHORITY TO ISSUE BONDS-STATE LAWS. COUNTIES-BoNDS-ExOESSIVE ISSUE-INNOOENT PUROHASERS.
ll.
While counties generally have no power to issue negotiable securities unless specially authorized by law, this is a question of state policy, and should be governed by the decisions of the state courts. OF TEXAS·
4, .SAME-INNOOENT
. 1n ,Texas, the counties, in the absence of legislative authority, have no power to issue negotiable securities. Nolan Co. v. State, (Tex. Sup.) 17 S. W. Rep. 826; Robertson v. Breedlove, 61 Tex. 316, followed. PUROHASERS-BoNDS PARTLY INVALID.
The bonds issued by a county in excess of the amount allowed by law are void, · and their collection cannot be enforced even by a bonafide, purchaser !oJ'value; and when a number of bonds, partly invalid on this account, are issued and delivered at the same time, or at different times as part of one transaction. the invalid portion should be equally distributed among all. and none should have priority.
5.
d.
Gen. Laws Tex.iSSI, pp. 5, 6, § 1, confers authority upon counties "to issue bonds in such amount as may be necessary to erect a suitable building for a court-house;" but section 3 of the same act declares that the county shall not issue a larger num· bel' of bonds than can be liqUidated in 10 years by an annual tax of one-fourth of ! 1 per cent. upon the property in the county. Held, that the latter section must be construed as a limitation upon the former. Russell v. CaGe, 1 S. W. Rep. 270, 66 Tex. 432, and Nolan Co. v. State, (Tex. Sup.) 17 S. W. Rep. 826, followed. SAME"';"NOTIdE.
SAME-AMOUNT ISSUABLE.
. ,,' . '. . .. ' I
1.
:, In· ascertaining the taxable vlllue liS a basis for determining the amount of bonds · which mllY be issued, the official IIssessment rolls are the only evidence, and, these '. being, public records, thEi purchasers of the bonds, notwithstanding any recitals ,'. therein, are chargeable with notice of them. and cannot claim to be innocent purchasers. SA'ME-'-ApPLIOATION Oli' PROOEEDS-ESTOPPEL.
.' iIf II county bas authority to issue bonds for one purpose, and uses the proceeds of lI.uch bondslor. a different pur.pose, they are not thereby invalidated in the hands of an inhocent plirchllser, and the county is estopped from denying that they were issued for the purpose for which they purported to be issued. AT LAW.
S. SAMll-:-ENFOROEMENT OF -i
. w'hill! aBult in equity iB ordinarily required to settle the equities and rights of bdndli'olders against a county and among themselves, yet a court of law will give .. ju.qgment in such ca!les when warranted by the plelldings and proofs.
At Law.
u'p,on 90upons of county bonds.
Action by David R. Francis against Howard county, Tex., .